Record order backlog, Frequentis remains on growth track in 2023 - despite macro uncertainties
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With the 15.7% increase in sales (to € 386 million), Frequentis AG (ISIN ATFREQUENT09, General Standard, FQT GY) was able to maintain the strong growth rate from H1 2022. Organic growth was 12.7% and was driven by both segments. The order backlog (€ 522 million; +11.6% y-o-y) as well as the order intake 2022 (€ 404.8 million; +21.5%) also point to further growth. On the earnings side, the company also exceeded our expectations, as the 2022 cost base grew less than we expected compared to the Corona years (low travel rate, fairs, etc.). Specific drivers allow Frequentis to grow above market average in the medium term, and the stability of the business model justifies a 23 P/E around 22.
Our DCF analysis yields a value per share of € 32.74 and the peer group analysis on the basis of 2023, 2024 and 2025 yields an average value per share of €32.46. With equal weighting of both approaches, the Fair Value per Frequentis share is € 32.60. Our fair value is thus 6.9% above the current share price and, based on our rating system, leads to our investment recommendation of "Hold".
Frequentis AG is an Austria-based supplier of communications and information systems, diversifying its activities into two business segments: ATM (Air Traffic Management) business segment, which includes ATM Civil, including Information Management, and Defense business fields, and PST (Public Safety & Transport) business segment, which includes Public Safety, Public Transport and Maritime business fields. As of December 31, 2010, the Company had seven wholly owned subsidiaries in the area of Sales & Operations, four wholly owned subsidiaries and one majority owned subsidiary, as well as one affiliate, APUS Software GmbH, in the area of Software, and two wholly owned, one majority owned, one minority owned, as well as one affiliate, 3T Communications AG, in the area of Services. The Company's subsidiaries are located in the United States, the United Kingdom, Canada, Australia, Germany, Singapore, Slovak Republic, Romania, and the Czech Republic.
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